Calderon, Janysse Clarence A.

Module 2 Activity Sheet

1. Discuss briefly the development of internal auditing.

The internal auditing profession evolved steadily with the progress of management
science after World War II. It is conceptually similar in many ways to financial auditing by public
accounting firms, quality assurance and banking compliance activities. While some of the audit
technique underlying internal auditing is derived from management consulting and public
accounting professions, the theory of internal auditing was conceived primarily by Lawrence
Sawyer (1911–2002), often referred to as "the father of modern internal auditing"; and the
current philosophy, theory and practice of modern internal auditing as defined by the
International Professional Practices Framework (IPPF) of the Institute of Internal Auditors owes
much to Sawyer's vision. With the implementation in the United States of the Sarbanes–Oxley
Act of 2002, the profession's exposure and value was enhanced, as many internal auditors
possessed the skills required to help companies meet the requirements of the law. However, the
focus by internal audit departments of publicly traded companies on SOX related financial policy
and procedures derailed progress made by the profession in the late 20th century toward Larry
Sawyer's vision for internal audit. Beginning in about 2010, the IIA once again began advocating
for the broader role internal auditing should play in the corporate arena, in keeping with the
IPPF's philosophy.

2. Why internal auditing is a great career choice?

The internal auditor is one of the in-demand finance and accounting positions in today's
hiring market. Risk and compliance concerns are driving hiring at many companies, particularly
in highly regulated industries like banking, insurance, healthcare and financial services. As
organizations push to improve internal controls and transparency, they are also looking for
internal auditors and information technology (IT) auditors. Many are also willing to train to fill
specific needs. Potential jobs on the career path include entry-level internal auditors, such as
auditing specialists, risk assessment specialists, lead internal auditors, financial analysts,
internal controls auditors and information systems auditors. Other positions are lead internal
auditors, such as senior internal auditors, and internal audit supervisors, such as audit
managers, risk managers and internal audit directors. Finally, there are the internal audit
executives, including finance directors, CFOs and controllers.